HB3902eng 101ST GENERAL ASSEMBLY

  
  
  

 


 
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1    AN ACT concerning revenue.
 
2    Be it enacted by the People of the State of Illinois,
3represented in the General Assembly:
 
4    Section 5. The Use Tax Act is amended by changing Section
53-5 as follows:
 
6    (35 ILCS 105/3-5)
7    Sec. 3-5. Exemptions. Use of the following tangible
8personal property is exempt from the tax imposed by this Act:
9    (1) Personal property purchased from a corporation,
10society, association, foundation, institution, or
11organization, other than a limited liability company, that is
12organized and operated as a not-for-profit service enterprise
13for the benefit of persons 65 years of age or older if the
14personal property was not purchased by the enterprise for the
15purpose of resale by the enterprise.
16    (2) Personal property purchased by a not-for-profit
17Illinois county fair association for use in conducting,
18operating, or promoting the county fair.
19    (3) Personal property purchased by a not-for-profit arts or
20cultural organization that establishes, by proof required by
21the Department by rule, that it has received an exemption under
22Section 501(c)(3) of the Internal Revenue Code and that is
23organized and operated primarily for the presentation or

 

 

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1support of arts or cultural programming, activities, or
2services. These organizations include, but are not limited to,
3music and dramatic arts organizations such as symphony
4orchestras and theatrical groups, arts and cultural service
5organizations, local arts councils, visual arts organizations,
6and media arts organizations. On and after July 1, 2001 (the
7effective date of Public Act 92-35), however, an entity
8otherwise eligible for this exemption shall not make tax-free
9purchases unless it has an active identification number issued
10by the Department.
11    (4) Personal property purchased by a governmental body, by
12a corporation, society, association, foundation, or
13institution organized and operated exclusively for charitable,
14religious, or educational purposes, or by a not-for-profit
15corporation, society, association, foundation, institution, or
16organization that has no compensated officers or employees and
17that is organized and operated primarily for the recreation of
18persons 55 years of age or older. A limited liability company
19may qualify for the exemption under this paragraph only if the
20limited liability company is organized and operated
21exclusively for educational purposes. On and after July 1,
221987, however, no entity otherwise eligible for this exemption
23shall make tax-free purchases unless it has an active exemption
24identification number issued by the Department.
25    (5) Until July 1, 2003, a passenger car that is a
26replacement vehicle to the extent that the purchase price of

 

 

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1the car is subject to the Replacement Vehicle Tax.
2    (6) Until July 1, 2003 and beginning again on September 1,
32004 through August 30, 2014, graphic arts machinery and
4equipment, including repair and replacement parts, both new and
5used, and including that manufactured on special order,
6certified by the purchaser to be used primarily for graphic
7arts production, and including machinery and equipment
8purchased for lease. Equipment includes chemicals or chemicals
9acting as catalysts but only if the chemicals or chemicals
10acting as catalysts effect a direct and immediate change upon a
11graphic arts product. Beginning on July 1, 2017, graphic arts
12machinery and equipment is included in the manufacturing and
13assembling machinery and equipment exemption under paragraph
14(18).
15    (7) Farm chemicals.
16    (8) Legal tender, currency, medallions, or gold or silver
17coinage issued by the State of Illinois, the government of the
18United States of America, or the government of any foreign
19country, and bullion.
20    (9) Personal property purchased from a teacher-sponsored
21student organization affiliated with an elementary or
22secondary school located in Illinois.
23    (10) A motor vehicle that is used for automobile renting,
24as defined in the Automobile Renting Occupation and Use Tax
25Act.
26    (11) Farm machinery and equipment, both new and used,

 

 

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1including that manufactured on special order, certified by the
2purchaser to be used primarily for production agriculture or
3State or federal agricultural programs, including individual
4replacement parts for the machinery and equipment, including
5machinery and equipment purchased for lease, and including
6implements of husbandry defined in Section 1-130 of the
7Illinois Vehicle Code, farm machinery and agricultural
8chemical and fertilizer spreaders, and nurse wagons required to
9be registered under Section 3-809 of the Illinois Vehicle Code,
10but excluding other motor vehicles required to be registered
11under the Illinois Vehicle Code. Horticultural polyhouses or
12hoop houses used for propagating, growing, or overwintering
13plants shall be considered farm machinery and equipment under
14this item (11). Agricultural chemical tender tanks and dry
15boxes shall include units sold separately from a motor vehicle
16required to be licensed and units sold mounted on a motor
17vehicle required to be licensed if the selling price of the
18tender is separately stated.
19    Farm machinery and equipment shall include precision
20farming equipment that is installed or purchased to be
21installed on farm machinery and equipment including, but not
22limited to, tractors, harvesters, sprayers, planters, seeders,
23or spreaders. Precision farming equipment includes, but is not
24limited to, soil testing sensors, computers, monitors,
25software, global positioning and mapping systems, and other
26such equipment.

 

 

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1    Farm machinery and equipment also includes computers,
2sensors, software, and related equipment used primarily in the
3computer-assisted operation of production agriculture
4facilities, equipment, and activities such as, but not limited
5to, the collection, monitoring, and correlation of animal and
6crop data for the purpose of formulating animal diets and
7agricultural chemicals. This item (11) is exempt from the
8provisions of Section 3-90.
9    (12) Until June 30, 2013, fuel and petroleum products sold
10to or used by an air common carrier, certified by the carrier
11to be used for consumption, shipment, or storage in the conduct
12of its business as an air common carrier, for a flight destined
13for or returning from a location or locations outside the
14United States without regard to previous or subsequent domestic
15stopovers.
16    Beginning July 1, 2013, fuel and petroleum products sold to
17or used by an air carrier, certified by the carrier to be used
18for consumption, shipment, or storage in the conduct of its
19business as an air common carrier, for a flight that (i) is
20engaged in foreign trade or is engaged in trade between the
21United States and any of its possessions and (ii) transports at
22least one individual or package for hire from the city of
23origination to the city of final destination on the same
24aircraft, without regard to a change in the flight number of
25that aircraft.
26    (13) Proceeds of mandatory service charges separately

 

 

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1stated on customers' bills for the purchase and consumption of
2food and beverages purchased at retail from a retailer, to the
3extent that the proceeds of the service charge are in fact
4turned over as tips or as a substitute for tips to the
5employees who participate directly in preparing, serving,
6hosting or cleaning up the food or beverage function with
7respect to which the service charge is imposed.
8    (14) Until July 1, 2003, oil field exploration, drilling,
9and production equipment, including (i) rigs and parts of rigs,
10rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
11tubular goods, including casing and drill strings, (iii) pumps
12and pump-jack units, (iv) storage tanks and flow lines, (v) any
13individual replacement part for oil field exploration,
14drilling, and production equipment, and (vi) machinery and
15equipment purchased for lease; but excluding motor vehicles
16required to be registered under the Illinois Vehicle Code.
17    (15) Photoprocessing machinery and equipment, including
18repair and replacement parts, both new and used, including that
19manufactured on special order, certified by the purchaser to be
20used primarily for photoprocessing, and including
21photoprocessing machinery and equipment purchased for lease.
22    (16) Until July 1, 2023, coal and aggregate exploration,
23mining, off-highway hauling, processing, maintenance, and
24reclamation equipment, including replacement parts and
25equipment, and including equipment purchased for lease, but
26excluding motor vehicles required to be registered under the

 

 

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1Illinois Vehicle Code. The changes made to this Section by
2Public Act 97-767 apply on and after July 1, 2003, but no claim
3for credit or refund is allowed on or after August 16, 2013
4(the effective date of Public Act 98-456) for such taxes paid
5during the period beginning July 1, 2003 and ending on August
616, 2013 (the effective date of Public Act 98-456).
7    (17) Until July 1, 2003, distillation machinery and
8equipment, sold as a unit or kit, assembled or installed by the
9retailer, certified by the user to be used only for the
10production of ethyl alcohol that will be used for consumption
11as motor fuel or as a component of motor fuel for the personal
12use of the user, and not subject to sale or resale.
13    (18) Manufacturing and assembling machinery and equipment
14used primarily in the process of manufacturing or assembling
15tangible personal property for wholesale or retail sale or
16lease, whether that sale or lease is made directly by the
17manufacturer or by some other person, whether the materials
18used in the process are owned by the manufacturer or some other
19person, or whether that sale or lease is made apart from or as
20an incident to the seller's engaging in the service occupation
21of producing machines, tools, dies, jigs, patterns, gauges, or
22other similar items of no commercial value on special order for
23a particular purchaser. The exemption provided by this
24paragraph (18) includes production related tangible personal
25property, as defined in Section 3-50, purchased on or after
26July 1, 2019. The exemption provided by this paragraph (18)

 

 

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1does not include machinery and equipment used in (i) the
2generation of electricity for wholesale or retail sale; (ii)
3the generation or treatment of natural or artificial gas for
4wholesale or retail sale that is delivered to customers through
5pipes, pipelines, or mains; or (iii) the treatment of water for
6wholesale or retail sale that is delivered to customers through
7pipes, pipelines, or mains. The provisions of Public Act 98-583
8are declaratory of existing law as to the meaning and scope of
9this exemption. Beginning on July 1, 2017, the exemption
10provided by this paragraph (18) includes, but is not limited
11to, graphic arts machinery and equipment, as defined in
12paragraph (6) of this Section.
13    (19) Personal property delivered to a purchaser or
14purchaser's donee inside Illinois when the purchase order for
15that personal property was received by a florist located
16outside Illinois who has a florist located inside Illinois
17deliver the personal property.
18    (20) Semen used for artificial insemination of livestock
19for direct agricultural production.
20    (21) Horses, or interests in horses, registered with and
21meeting the requirements of any of the Arabian Horse Club
22Registry of America, Appaloosa Horse Club, American Quarter
23Horse Association, United States Trotting Association, or
24Jockey Club, as appropriate, used for purposes of breeding or
25racing for prizes. This item (21) is exempt from the provisions
26of Section 3-90, and the exemption provided for under this item

 

 

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1(21) applies for all periods beginning May 30, 1995, but no
2claim for credit or refund is allowed on or after January 1,
32008 for such taxes paid during the period beginning May 30,
42000 and ending on January 1, 2008.
5    (22) Computers and communications equipment utilized for
6any hospital purpose and equipment used in the diagnosis,
7analysis, or treatment of hospital patients purchased by a
8lessor who leases the equipment, under a lease of one year or
9longer executed or in effect at the time the lessor would
10otherwise be subject to the tax imposed by this Act, to a
11hospital that has been issued an active tax exemption
12identification number by the Department under Section 1g of the
13Retailers' Occupation Tax Act. If the equipment is leased in a
14manner that does not qualify for this exemption or is used in
15any other non-exempt manner, the lessor shall be liable for the
16tax imposed under this Act or the Service Use Tax Act, as the
17case may be, based on the fair market value of the property at
18the time the non-qualifying use occurs. No lessor shall collect
19or attempt to collect an amount (however designated) that
20purports to reimburse that lessor for the tax imposed by this
21Act or the Service Use Tax Act, as the case may be, if the tax
22has not been paid by the lessor. If a lessor improperly
23collects any such amount from the lessee, the lessee shall have
24a legal right to claim a refund of that amount from the lessor.
25If, however, that amount is not refunded to the lessee for any
26reason, the lessor is liable to pay that amount to the

 

 

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1Department.
2    (23) Personal property purchased by a lessor who leases the
3property, under a lease of one year or longer executed or in
4effect at the time the lessor would otherwise be subject to the
5tax imposed by this Act, to a governmental body that has been
6issued an active sales tax exemption identification number by
7the Department under Section 1g of the Retailers' Occupation
8Tax Act. If the property is leased in a manner that does not
9qualify for this exemption or used in any other non-exempt
10manner, the lessor shall be liable for the tax imposed under
11this Act or the Service Use Tax Act, as the case may be, based
12on the fair market value of the property at the time the
13non-qualifying use occurs. No lessor shall collect or attempt
14to collect an amount (however designated) that purports to
15reimburse that lessor for the tax imposed by this Act or the
16Service Use Tax Act, as the case may be, if the tax has not been
17paid by the lessor. If a lessor improperly collects any such
18amount from the lessee, the lessee shall have a legal right to
19claim a refund of that amount from the lessor. If, however,
20that amount is not refunded to the lessee for any reason, the
21lessor is liable to pay that amount to the Department.
22    (24) Beginning with taxable years ending on or after
23December 31, 1995 and ending with taxable years ending on or
24before December 31, 2004, personal property that is donated for
25disaster relief to be used in a State or federally declared
26disaster area in Illinois or bordering Illinois by a

 

 

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1manufacturer or retailer that is registered in this State to a
2corporation, society, association, foundation, or institution
3that has been issued a sales tax exemption identification
4number by the Department that assists victims of the disaster
5who reside within the declared disaster area.
6    (25) Beginning with taxable years ending on or after
7December 31, 1995 and ending with taxable years ending on or
8before December 31, 2004, personal property that is used in the
9performance of infrastructure repairs in this State, including
10but not limited to municipal roads and streets, access roads,
11bridges, sidewalks, waste disposal systems, water and sewer
12line extensions, water distribution and purification
13facilities, storm water drainage and retention facilities, and
14sewage treatment facilities, resulting from a State or
15federally declared disaster in Illinois or bordering Illinois
16when such repairs are initiated on facilities located in the
17declared disaster area within 6 months after the disaster.
18    (26) Beginning July 1, 1999, game or game birds purchased
19at a "game breeding and hunting preserve area" as that term is
20used in the Wildlife Code. This paragraph is exempt from the
21provisions of Section 3-90.
22    (27) A motor vehicle, as that term is defined in Section
231-146 of the Illinois Vehicle Code, that is donated to a
24corporation, limited liability company, society, association,
25foundation, or institution that is determined by the Department
26to be organized and operated exclusively for educational

 

 

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1purposes. For purposes of this exemption, "a corporation,
2limited liability company, society, association, foundation,
3or institution organized and operated exclusively for
4educational purposes" means all tax-supported public schools,
5private schools that offer systematic instruction in useful
6branches of learning by methods common to public schools and
7that compare favorably in their scope and intensity with the
8course of study presented in tax-supported schools, and
9vocational or technical schools or institutes organized and
10operated exclusively to provide a course of study of not less
11than 6 weeks duration and designed to prepare individuals to
12follow a trade or to pursue a manual, technical, mechanical,
13industrial, business, or commercial occupation.
14    (28) Beginning January 1, 2000, personal property,
15including food, purchased through fundraising events for the
16benefit of a public or private elementary or secondary school,
17a group of those schools, or one or more school districts if
18the events are sponsored by an entity recognized by the school
19district that consists primarily of volunteers and includes
20parents and teachers of the school children. This paragraph
21does not apply to fundraising events (i) for the benefit of
22private home instruction or (ii) for which the fundraising
23entity purchases the personal property sold at the events from
24another individual or entity that sold the property for the
25purpose of resale by the fundraising entity and that profits
26from the sale to the fundraising entity. This paragraph is

 

 

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1exempt from the provisions of Section 3-90.
2    (29) Beginning January 1, 2000 and through December 31,
32001, new or used automatic vending machines that prepare and
4serve hot food and beverages, including coffee, soup, and other
5items, and replacement parts for these machines. Beginning
6January 1, 2002 and through June 30, 2003, machines and parts
7for machines used in commercial, coin-operated amusement and
8vending business if a use or occupation tax is paid on the
9gross receipts derived from the use of the commercial,
10coin-operated amusement and vending machines. This paragraph
11is exempt from the provisions of Section 3-90.
12    (30) Beginning January 1, 2001 and through June 30, 2016,
13food for human consumption that is to be consumed off the
14premises where it is sold (other than alcoholic beverages, soft
15drinks, and food that has been prepared for immediate
16consumption) and prescription and nonprescription medicines,
17drugs, medical appliances, and insulin, urine testing
18materials, syringes, and needles used by diabetics, for human
19use, when purchased for use by a person receiving medical
20assistance under Article V of the Illinois Public Aid Code who
21resides in a licensed long-term care facility, as defined in
22the Nursing Home Care Act, or in a licensed facility as defined
23in the ID/DD Community Care Act, the MC/DD Act, or the
24Specialized Mental Health Rehabilitation Act of 2013.
25    (31) Beginning on August 2, 2001 (the effective date of
26Public Act 92-227), computers and communications equipment

 

 

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1utilized for any hospital purpose and equipment used in the
2diagnosis, analysis, or treatment of hospital patients
3purchased by a lessor who leases the equipment, under a lease
4of one year or longer executed or in effect at the time the
5lessor would otherwise be subject to the tax imposed by this
6Act, to a hospital that has been issued an active tax exemption
7identification number by the Department under Section 1g of the
8Retailers' Occupation Tax Act. If the equipment is leased in a
9manner that does not qualify for this exemption or is used in
10any other nonexempt manner, the lessor shall be liable for the
11tax imposed under this Act or the Service Use Tax Act, as the
12case may be, based on the fair market value of the property at
13the time the nonqualifying use occurs. No lessor shall collect
14or attempt to collect an amount (however designated) that
15purports to reimburse that lessor for the tax imposed by this
16Act or the Service Use Tax Act, as the case may be, if the tax
17has not been paid by the lessor. If a lessor improperly
18collects any such amount from the lessee, the lessee shall have
19a legal right to claim a refund of that amount from the lessor.
20If, however, that amount is not refunded to the lessee for any
21reason, the lessor is liable to pay that amount to the
22Department. This paragraph is exempt from the provisions of
23Section 3-90.
24    (32) Beginning on August 2, 2001 (the effective date of
25Public Act 92-227), personal property purchased by a lessor who
26leases the property, under a lease of one year or longer

 

 

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1executed or in effect at the time the lessor would otherwise be
2subject to the tax imposed by this Act, to a governmental body
3that has been issued an active sales tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act. If the property is leased in a
6manner that does not qualify for this exemption or used in any
7other nonexempt manner, the lessor shall be liable for the tax
8imposed under this Act or the Service Use Tax Act, as the case
9may be, based on the fair market value of the property at the
10time the nonqualifying use occurs. No lessor shall collect or
11attempt to collect an amount (however designated) that purports
12to reimburse that lessor for the tax imposed by this Act or the
13Service Use Tax Act, as the case may be, if the tax has not been
14paid by the lessor. If a lessor improperly collects any such
15amount from the lessee, the lessee shall have a legal right to
16claim a refund of that amount from the lessor. If, however,
17that amount is not refunded to the lessee for any reason, the
18lessor is liable to pay that amount to the Department. This
19paragraph is exempt from the provisions of Section 3-90.
20    (33) On and after July 1, 2003 and through June 30, 2004,
21the use in this State of motor vehicles of the second division
22with a gross vehicle weight in excess of 8,000 pounds and that
23are subject to the commercial distribution fee imposed under
24Section 3-815.1 of the Illinois Vehicle Code. Beginning on July
251, 2004 and through June 30, 2005, the use in this State of
26motor vehicles of the second division: (i) with a gross vehicle

 

 

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1weight rating in excess of 8,000 pounds; (ii) that are subject
2to the commercial distribution fee imposed under Section
33-815.1 of the Illinois Vehicle Code; and (iii) that are
4primarily used for commercial purposes. Through June 30, 2005,
5this exemption applies to repair and replacement parts added
6after the initial purchase of such a motor vehicle if that
7motor vehicle is used in a manner that would qualify for the
8rolling stock exemption otherwise provided for in this Act. For
9purposes of this paragraph, the term "used for commercial
10purposes" means the transportation of persons or property in
11furtherance of any commercial or industrial enterprise,
12whether for-hire or not.
13    (34) Beginning January 1, 2008, tangible personal property
14used in the construction or maintenance of a community water
15supply, as defined under Section 3.145 of the Environmental
16Protection Act, that is operated by a not-for-profit
17corporation that holds a valid water supply permit issued under
18Title IV of the Environmental Protection Act. This paragraph is
19exempt from the provisions of Section 3-90.
20    (35) Beginning January 1, 2010 and continuing through
21December 31, 2024, materials, parts, equipment, components,
22and furnishings incorporated into or upon an aircraft as part
23of the modification, refurbishment, completion, replacement,
24repair, or maintenance of the aircraft. This exemption includes
25consumable supplies used in the modification, refurbishment,
26completion, replacement, repair, and maintenance of aircraft,

 

 

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1but excludes any materials, parts, equipment, components, and
2consumable supplies used in the modification, replacement,
3repair, and maintenance of aircraft engines or power plants,
4whether such engines or power plants are installed or
5uninstalled upon any such aircraft. "Consumable supplies"
6include, but are not limited to, adhesive, tape, sandpaper,
7general purpose lubricants, cleaning solution, latex gloves,
8and protective films. This exemption applies only to the use of
9qualifying tangible personal property by persons who modify,
10refurbish, complete, repair, replace, or maintain aircraft and
11who (i) hold an Air Agency Certificate and are empowered to
12operate an approved repair station by the Federal Aviation
13Administration, (ii) have a Class IV Rating, and (iii) conduct
14operations in accordance with Part 145 of the Federal Aviation
15Regulations. The exemption does not include aircraft operated
16by a commercial air carrier providing scheduled passenger air
17service pursuant to authority issued under Part 121 or Part 129
18of the Federal Aviation Regulations. The changes made to this
19paragraph (35) by Public Act 98-534 are declarative of existing
20law. It is the intent of the General Assembly that the
21exemption under this paragraph (35) applies continuously from
22January 1, 2010 through December 31, 2024; however, no claim
23for credit or refund is allowed for taxes paid as a result of
24the disallowance of this exemption on or after January 1, 2015
25and prior to the effective date of this amendatory Act of the
26101st General Assembly.

 

 

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1    (36) Tangible personal property purchased by a
2public-facilities corporation, as described in Section
311-65-10 of the Illinois Municipal Code, for purposes of
4constructing or furnishing a municipal convention hall, but
5only if the legal title to the municipal convention hall is
6transferred to the municipality without any further
7consideration by or on behalf of the municipality at the time
8of the completion of the municipal convention hall or upon the
9retirement or redemption of any bonds or other debt instruments
10issued by the public-facilities corporation in connection with
11the development of the municipal convention hall. This
12exemption includes existing public-facilities corporations as
13provided in Section 11-65-25 of the Illinois Municipal Code.
14This paragraph is exempt from the provisions of Section 3-90.
15    (37) Beginning January 1, 2017, menstrual pads, tampons,
16and menstrual cups.
17    (38) Merchandise that is subject to the Rental Purchase
18Agreement Occupation and Use Tax. The purchaser must certify
19that the item is purchased to be rented subject to a rental
20purchase agreement, as defined in the Rental Purchase Agreement
21Act, and provide proof of registration under the Rental
22Purchase Agreement Occupation and Use Tax Act. This paragraph
23is exempt from the provisions of Section 3-90.
24    (39) Tangible personal property purchased by a purchaser
25who is exempt from the tax imposed by this Act by operation of
26federal law. This paragraph is exempt from the provisions of

 

 

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1Section 3-90.
2    (40) Qualified tangible personal property used in the
3construction or operation of a data center that has been
4granted a certificate of exemption by the Department of
5Commerce and Economic Opportunity, whether that tangible
6personal property is purchased by the owner, operator, or
7tenant of the data center or by a contractor or subcontractor
8of the owner, operator, or tenant. Data centers that would have
9qualified for a certificate of exemption prior to January 1,
102020 had Public Act 101-31 this amendatory Act of the 101st
11General Assembly been in effect, may apply for and obtain an
12exemption for subsequent purchases of computer equipment or
13enabling software purchased or leased to upgrade, supplement,
14or replace computer equipment or enabling software purchased or
15leased in the original investment that would have qualified.
16    The Department of Commerce and Economic Opportunity shall
17grant a certificate of exemption under this item (40) to
18qualified data centers as defined by Section 605-1025 of the
19Department of Commerce and Economic Opportunity Law of the
20Civil Administrative Code of Illinois.
21    For the purposes of this item (40):
22        "Data center" means a building or a series of buildings
23    rehabilitated or constructed to house working servers in
24    one physical location or multiple sites within the State of
25    Illinois.
26        "Qualified tangible personal property" means:

 

 

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1    electrical systems and equipment; climate control and
2    chilling equipment and systems; mechanical systems and
3    equipment; monitoring and secure systems; emergency
4    generators; hardware; computers; servers; data storage
5    devices; network connectivity equipment; racks; cabinets;
6    telecommunications cabling infrastructure; raised floor
7    systems; peripheral components or systems; software;
8    mechanical, electrical, or plumbing systems; battery
9    systems; cooling systems and towers; temperature control
10    systems; other cabling; and other data center
11    infrastructure equipment and systems necessary to operate
12    qualified tangible personal property, including fixtures;
13    and component parts of any of the foregoing, including
14    installation, maintenance, repair, refurbishment, and
15    replacement of qualified tangible personal property to
16    generate, transform, transmit, distribute, or manage
17    electricity necessary to operate qualified tangible
18    personal property; and all other tangible personal
19    property that is essential to the operations of a computer
20    data center. The term "qualified tangible personal
21    property" also includes building materials physically
22    incorporated in to the qualifying data center. To document
23    the exemption allowed under this Section, the retailer must
24    obtain from the purchaser a copy of the certificate of
25    eligibility issued by the Department of Commerce and
26    Economic Opportunity.

 

 

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1    This item (40) is exempt from the provisions of Section
23-90.
3(Source: P.A. 100-22, eff. 7-6-17; 100-437, eff. 1-1-18;
4100-594, eff. 6-29-18; 100-863, eff. 8-14-18; 100-1171, eff.
51-4-19; 101-9, eff. 6-5-19; 101-31, eff. 6-28-19; 101-81, eff.
67-12-19; revised 9-23-19.)
 
7    Section 10. The Service Use Tax Act is amended by changing
8Section 3-5 as follows:
 
9    (35 ILCS 110/3-5)
10    Sec. 3-5. Exemptions. Use of the following tangible
11personal property is exempt from the tax imposed by this Act:
12    (1) Personal property purchased from a corporation,
13society, association, foundation, institution, or
14organization, other than a limited liability company, that is
15organized and operated as a not-for-profit service enterprise
16for the benefit of persons 65 years of age or older if the
17personal property was not purchased by the enterprise for the
18purpose of resale by the enterprise.
19    (2) Personal property purchased by a non-profit Illinois
20county fair association for use in conducting, operating, or
21promoting the county fair.
22    (3) Personal property purchased by a not-for-profit arts or
23cultural organization that establishes, by proof required by
24the Department by rule, that it has received an exemption under

 

 

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1Section 501(c)(3) of the Internal Revenue Code and that is
2organized and operated primarily for the presentation or
3support of arts or cultural programming, activities, or
4services. These organizations include, but are not limited to,
5music and dramatic arts organizations such as symphony
6orchestras and theatrical groups, arts and cultural service
7organizations, local arts councils, visual arts organizations,
8and media arts organizations. On and after July 1, 2001 (the
9effective date of Public Act 92-35), however, an entity
10otherwise eligible for this exemption shall not make tax-free
11purchases unless it has an active identification number issued
12by the Department.
13    (4) Legal tender, currency, medallions, or gold or silver
14coinage issued by the State of Illinois, the government of the
15United States of America, or the government of any foreign
16country, and bullion.
17    (5) Until July 1, 2003 and beginning again on September 1,
182004 through August 30, 2014, graphic arts machinery and
19equipment, including repair and replacement parts, both new and
20used, and including that manufactured on special order or
21purchased for lease, certified by the purchaser to be used
22primarily for graphic arts production. Equipment includes
23chemicals or chemicals acting as catalysts but only if the
24chemicals or chemicals acting as catalysts effect a direct and
25immediate change upon a graphic arts product. Beginning on July
261, 2017, graphic arts machinery and equipment is included in

 

 

HB3902 Engrossed- 23 -LRB101 13854 HLH 62714 b

1the manufacturing and assembling machinery and equipment
2exemption under Section 2 of this Act.
3    (6) Personal property purchased from a teacher-sponsored
4student organization affiliated with an elementary or
5secondary school located in Illinois.
6    (7) Farm machinery and equipment, both new and used,
7including that manufactured on special order, certified by the
8purchaser to be used primarily for production agriculture or
9State or federal agricultural programs, including individual
10replacement parts for the machinery and equipment, including
11machinery and equipment purchased for lease, and including
12implements of husbandry defined in Section 1-130 of the
13Illinois Vehicle Code, farm machinery and agricultural
14chemical and fertilizer spreaders, and nurse wagons required to
15be registered under Section 3-809 of the Illinois Vehicle Code,
16but excluding other motor vehicles required to be registered
17under the Illinois Vehicle Code. Horticultural polyhouses or
18hoop houses used for propagating, growing, or overwintering
19plants shall be considered farm machinery and equipment under
20this item (7). Agricultural chemical tender tanks and dry boxes
21shall include units sold separately from a motor vehicle
22required to be licensed and units sold mounted on a motor
23vehicle required to be licensed if the selling price of the
24tender is separately stated.
25    Farm machinery and equipment shall include precision
26farming equipment that is installed or purchased to be

 

 

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1installed on farm machinery and equipment including, but not
2limited to, tractors, harvesters, sprayers, planters, seeders,
3or spreaders. Precision farming equipment includes, but is not
4limited to, soil testing sensors, computers, monitors,
5software, global positioning and mapping systems, and other
6such equipment.
7    Farm machinery and equipment also includes computers,
8sensors, software, and related equipment used primarily in the
9computer-assisted operation of production agriculture
10facilities, equipment, and activities such as, but not limited
11to, the collection, monitoring, and correlation of animal and
12crop data for the purpose of formulating animal diets and
13agricultural chemicals. This item (7) is exempt from the
14provisions of Section 3-75.
15    (8) Until June 30, 2013, fuel and petroleum products sold
16to or used by an air common carrier, certified by the carrier
17to be used for consumption, shipment, or storage in the conduct
18of its business as an air common carrier, for a flight destined
19for or returning from a location or locations outside the
20United States without regard to previous or subsequent domestic
21stopovers.
22    Beginning July 1, 2013, fuel and petroleum products sold to
23or used by an air carrier, certified by the carrier to be used
24for consumption, shipment, or storage in the conduct of its
25business as an air common carrier, for a flight that (i) is
26engaged in foreign trade or is engaged in trade between the

 

 

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1United States and any of its possessions and (ii) transports at
2least one individual or package for hire from the city of
3origination to the city of final destination on the same
4aircraft, without regard to a change in the flight number of
5that aircraft.
6    (9) Proceeds of mandatory service charges separately
7stated on customers' bills for the purchase and consumption of
8food and beverages acquired as an incident to the purchase of a
9service from a serviceman, to the extent that the proceeds of
10the service charge are in fact turned over as tips or as a
11substitute for tips to the employees who participate directly
12in preparing, serving, hosting or cleaning up the food or
13beverage function with respect to which the service charge is
14imposed.
15    (10) Until July 1, 2003, oil field exploration, drilling,
16and production equipment, including (i) rigs and parts of rigs,
17rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
18tubular goods, including casing and drill strings, (iii) pumps
19and pump-jack units, (iv) storage tanks and flow lines, (v) any
20individual replacement part for oil field exploration,
21drilling, and production equipment, and (vi) machinery and
22equipment purchased for lease; but excluding motor vehicles
23required to be registered under the Illinois Vehicle Code.
24    (11) Proceeds from the sale of photoprocessing machinery
25and equipment, including repair and replacement parts, both new
26and used, including that manufactured on special order,

 

 

HB3902 Engrossed- 26 -LRB101 13854 HLH 62714 b

1certified by the purchaser to be used primarily for
2photoprocessing, and including photoprocessing machinery and
3equipment purchased for lease.
4    (12) Until July 1, 2023, coal and aggregate exploration,
5mining, off-highway hauling, processing, maintenance, and
6reclamation equipment, including replacement parts and
7equipment, and including equipment purchased for lease, but
8excluding motor vehicles required to be registered under the
9Illinois Vehicle Code. The changes made to this Section by
10Public Act 97-767 apply on and after July 1, 2003, but no claim
11for credit or refund is allowed on or after August 16, 2013
12(the effective date of Public Act 98-456) for such taxes paid
13during the period beginning July 1, 2003 and ending on August
1416, 2013 (the effective date of Public Act 98-456).
15    (13) Semen used for artificial insemination of livestock
16for direct agricultural production.
17    (14) Horses, or interests in horses, registered with and
18meeting the requirements of any of the Arabian Horse Club
19Registry of America, Appaloosa Horse Club, American Quarter
20Horse Association, United States Trotting Association, or
21Jockey Club, as appropriate, used for purposes of breeding or
22racing for prizes. This item (14) is exempt from the provisions
23of Section 3-75, and the exemption provided for under this item
24(14) applies for all periods beginning May 30, 1995, but no
25claim for credit or refund is allowed on or after January 1,
262008 (the effective date of Public Act 95-88) for such taxes

 

 

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1paid during the period beginning May 30, 2000 and ending on
2January 1, 2008 (the effective date of Public Act 95-88).
3    (15) Computers and communications equipment utilized for
4any hospital purpose and equipment used in the diagnosis,
5analysis, or treatment of hospital patients purchased by a
6lessor who leases the equipment, under a lease of one year or
7longer executed or in effect at the time the lessor would
8otherwise be subject to the tax imposed by this Act, to a
9hospital that has been issued an active tax exemption
10identification number by the Department under Section 1g of the
11Retailers' Occupation Tax Act. If the equipment is leased in a
12manner that does not qualify for this exemption or is used in
13any other non-exempt manner, the lessor shall be liable for the
14tax imposed under this Act or the Use Tax Act, as the case may
15be, based on the fair market value of the property at the time
16the non-qualifying use occurs. No lessor shall collect or
17attempt to collect an amount (however designated) that purports
18to reimburse that lessor for the tax imposed by this Act or the
19Use Tax Act, as the case may be, if the tax has not been paid by
20the lessor. If a lessor improperly collects any such amount
21from the lessee, the lessee shall have a legal right to claim a
22refund of that amount from the lessor. If, however, that amount
23is not refunded to the lessee for any reason, the lessor is
24liable to pay that amount to the Department.
25    (16) Personal property purchased by a lessor who leases the
26property, under a lease of one year or longer executed or in

 

 

HB3902 Engrossed- 28 -LRB101 13854 HLH 62714 b

1effect at the time the lessor would otherwise be subject to the
2tax imposed by this Act, to a governmental body that has been
3issued an active tax exemption identification number by the
4Department under Section 1g of the Retailers' Occupation Tax
5Act. If the property is leased in a manner that does not
6qualify for this exemption or is used in any other non-exempt
7manner, the lessor shall be liable for the tax imposed under
8this Act or the Use Tax Act, as the case may be, based on the
9fair market value of the property at the time the
10non-qualifying use occurs. No lessor shall collect or attempt
11to collect an amount (however designated) that purports to
12reimburse that lessor for the tax imposed by this Act or the
13Use Tax Act, as the case may be, if the tax has not been paid by
14the lessor. If a lessor improperly collects any such amount
15from the lessee, the lessee shall have a legal right to claim a
16refund of that amount from the lessor. If, however, that amount
17is not refunded to the lessee for any reason, the lessor is
18liable to pay that amount to the Department.
19    (17) Beginning with taxable years ending on or after
20December 31, 1995 and ending with taxable years ending on or
21before December 31, 2004, personal property that is donated for
22disaster relief to be used in a State or federally declared
23disaster area in Illinois or bordering Illinois by a
24manufacturer or retailer that is registered in this State to a
25corporation, society, association, foundation, or institution
26that has been issued a sales tax exemption identification

 

 

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1number by the Department that assists victims of the disaster
2who reside within the declared disaster area.
3    (18) Beginning with taxable years ending on or after
4December 31, 1995 and ending with taxable years ending on or
5before December 31, 2004, personal property that is used in the
6performance of infrastructure repairs in this State, including
7but not limited to municipal roads and streets, access roads,
8bridges, sidewalks, waste disposal systems, water and sewer
9line extensions, water distribution and purification
10facilities, storm water drainage and retention facilities, and
11sewage treatment facilities, resulting from a State or
12federally declared disaster in Illinois or bordering Illinois
13when such repairs are initiated on facilities located in the
14declared disaster area within 6 months after the disaster.
15    (19) Beginning July 1, 1999, game or game birds purchased
16at a "game breeding and hunting preserve area" as that term is
17used in the Wildlife Code. This paragraph is exempt from the
18provisions of Section 3-75.
19    (20) A motor vehicle, as that term is defined in Section
201-146 of the Illinois Vehicle Code, that is donated to a
21corporation, limited liability company, society, association,
22foundation, or institution that is determined by the Department
23to be organized and operated exclusively for educational
24purposes. For purposes of this exemption, "a corporation,
25limited liability company, society, association, foundation,
26or institution organized and operated exclusively for

 

 

HB3902 Engrossed- 30 -LRB101 13854 HLH 62714 b

1educational purposes" means all tax-supported public schools,
2private schools that offer systematic instruction in useful
3branches of learning by methods common to public schools and
4that compare favorably in their scope and intensity with the
5course of study presented in tax-supported schools, and
6vocational or technical schools or institutes organized and
7operated exclusively to provide a course of study of not less
8than 6 weeks duration and designed to prepare individuals to
9follow a trade or to pursue a manual, technical, mechanical,
10industrial, business, or commercial occupation.
11    (21) Beginning January 1, 2000, personal property,
12including food, purchased through fundraising events for the
13benefit of a public or private elementary or secondary school,
14a group of those schools, or one or more school districts if
15the events are sponsored by an entity recognized by the school
16district that consists primarily of volunteers and includes
17parents and teachers of the school children. This paragraph
18does not apply to fundraising events (i) for the benefit of
19private home instruction or (ii) for which the fundraising
20entity purchases the personal property sold at the events from
21another individual or entity that sold the property for the
22purpose of resale by the fundraising entity and that profits
23from the sale to the fundraising entity. This paragraph is
24exempt from the provisions of Section 3-75.
25    (22) Beginning January 1, 2000 and through December 31,
262001, new or used automatic vending machines that prepare and

 

 

HB3902 Engrossed- 31 -LRB101 13854 HLH 62714 b

1serve hot food and beverages, including coffee, soup, and other
2items, and replacement parts for these machines. Beginning
3January 1, 2002 and through June 30, 2003, machines and parts
4for machines used in commercial, coin-operated amusement and
5vending business if a use or occupation tax is paid on the
6gross receipts derived from the use of the commercial,
7coin-operated amusement and vending machines. This paragraph
8is exempt from the provisions of Section 3-75.
9    (23) Beginning August 23, 2001 and through June 30, 2016,
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages, soft
12drinks, and food that has been prepared for immediate
13consumption) and prescription and nonprescription medicines,
14drugs, medical appliances, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, when purchased for use by a person receiving medical
17assistance under Article V of the Illinois Public Aid Code who
18resides in a licensed long-term care facility, as defined in
19the Nursing Home Care Act, or in a licensed facility as defined
20in the ID/DD Community Care Act, the MC/DD Act, or the
21Specialized Mental Health Rehabilitation Act of 2013.
22    (24) Beginning on August 2, 2001 (the effective date of
23Public Act 92-227), computers and communications equipment
24utilized for any hospital purpose and equipment used in the
25diagnosis, analysis, or treatment of hospital patients
26purchased by a lessor who leases the equipment, under a lease

 

 

HB3902 Engrossed- 32 -LRB101 13854 HLH 62714 b

1of one year or longer executed or in effect at the time the
2lessor would otherwise be subject to the tax imposed by this
3Act, to a hospital that has been issued an active tax exemption
4identification number by the Department under Section 1g of the
5Retailers' Occupation Tax Act. If the equipment is leased in a
6manner that does not qualify for this exemption or is used in
7any other nonexempt manner, the lessor shall be liable for the
8tax imposed under this Act or the Use Tax Act, as the case may
9be, based on the fair market value of the property at the time
10the nonqualifying use occurs. No lessor shall collect or
11attempt to collect an amount (however designated) that purports
12to reimburse that lessor for the tax imposed by this Act or the
13Use Tax Act, as the case may be, if the tax has not been paid by
14the lessor. If a lessor improperly collects any such amount
15from the lessee, the lessee shall have a legal right to claim a
16refund of that amount from the lessor. If, however, that amount
17is not refunded to the lessee for any reason, the lessor is
18liable to pay that amount to the Department. This paragraph is
19exempt from the provisions of Section 3-75.
20    (25) Beginning on August 2, 2001 (the effective date of
21Public Act 92-227), personal property purchased by a lessor who
22leases the property, under a lease of one year or longer
23executed or in effect at the time the lessor would otherwise be
24subject to the tax imposed by this Act, to a governmental body
25that has been issued an active tax exemption identification
26number by the Department under Section 1g of the Retailers'

 

 

HB3902 Engrossed- 33 -LRB101 13854 HLH 62714 b

1Occupation Tax Act. If the property is leased in a manner that
2does not qualify for this exemption or is used in any other
3nonexempt manner, the lessor shall be liable for the tax
4imposed under this Act or the Use Tax Act, as the case may be,
5based on the fair market value of the property at the time the
6nonqualifying use occurs. No lessor shall collect or attempt to
7collect an amount (however designated) that purports to
8reimburse that lessor for the tax imposed by this Act or the
9Use Tax Act, as the case may be, if the tax has not been paid by
10the lessor. If a lessor improperly collects any such amount
11from the lessee, the lessee shall have a legal right to claim a
12refund of that amount from the lessor. If, however, that amount
13is not refunded to the lessee for any reason, the lessor is
14liable to pay that amount to the Department. This paragraph is
15exempt from the provisions of Section 3-75.
16    (26) Beginning January 1, 2008, tangible personal property
17used in the construction or maintenance of a community water
18supply, as defined under Section 3.145 of the Environmental
19Protection Act, that is operated by a not-for-profit
20corporation that holds a valid water supply permit issued under
21Title IV of the Environmental Protection Act. This paragraph is
22exempt from the provisions of Section 3-75.
23    (27) Beginning January 1, 2010 and continuing through
24December 31, 2024, materials, parts, equipment, components,
25and furnishings incorporated into or upon an aircraft as part
26of the modification, refurbishment, completion, replacement,

 

 

HB3902 Engrossed- 34 -LRB101 13854 HLH 62714 b

1repair, or maintenance of the aircraft. This exemption includes
2consumable supplies used in the modification, refurbishment,
3completion, replacement, repair, and maintenance of aircraft,
4but excludes any materials, parts, equipment, components, and
5consumable supplies used in the modification, replacement,
6repair, and maintenance of aircraft engines or power plants,
7whether such engines or power plants are installed or
8uninstalled upon any such aircraft. "Consumable supplies"
9include, but are not limited to, adhesive, tape, sandpaper,
10general purpose lubricants, cleaning solution, latex gloves,
11and protective films. This exemption applies only to the use of
12qualifying tangible personal property transferred incident to
13the modification, refurbishment, completion, replacement,
14repair, or maintenance of aircraft by persons who (i) hold an
15Air Agency Certificate and are empowered to operate an approved
16repair station by the Federal Aviation Administration, (ii)
17have a Class IV Rating, and (iii) conduct operations in
18accordance with Part 145 of the Federal Aviation Regulations.
19The exemption does not include aircraft operated by a
20commercial air carrier providing scheduled passenger air
21service pursuant to authority issued under Part 121 or Part 129
22of the Federal Aviation Regulations. The changes made to this
23paragraph (27) by Public Act 98-534 are declarative of existing
24law. It is the intent of the General Assembly that the
25exemption under this paragraph (27) applies continuously from
26January 1, 2010 through December 31, 2024; however, no claim

 

 

HB3902 Engrossed- 35 -LRB101 13854 HLH 62714 b

1for credit or refund is allowed for taxes paid as a result of
2the disallowance of this exemption on or after January 1, 2015
3and prior to the effective date of this amendatory Act of the
4101st General Assembly.
5    (28) Tangible personal property purchased by a
6public-facilities corporation, as described in Section
711-65-10 of the Illinois Municipal Code, for purposes of
8constructing or furnishing a municipal convention hall, but
9only if the legal title to the municipal convention hall is
10transferred to the municipality without any further
11consideration by or on behalf of the municipality at the time
12of the completion of the municipal convention hall or upon the
13retirement or redemption of any bonds or other debt instruments
14issued by the public-facilities corporation in connection with
15the development of the municipal convention hall. This
16exemption includes existing public-facilities corporations as
17provided in Section 11-65-25 of the Illinois Municipal Code.
18This paragraph is exempt from the provisions of Section 3-75.
19    (29) Beginning January 1, 2017, menstrual pads, tampons,
20and menstrual cups.
21    (30) Tangible personal property transferred to a purchaser
22who is exempt from the tax imposed by this Act by operation of
23federal law. This paragraph is exempt from the provisions of
24Section 3-75.
25    (31) Qualified tangible personal property used in the
26construction or operation of a data center that has been

 

 

HB3902 Engrossed- 36 -LRB101 13854 HLH 62714 b

1granted a certificate of exemption by the Department of
2Commerce and Economic Opportunity, whether that tangible
3personal property is purchased by the owner, operator, or
4tenant of the data center or by a contractor or subcontractor
5of the owner, operator, or tenant. Data centers that would have
6qualified for a certificate of exemption prior to January 1,
72020 had this amendatory Act of the 101st General Assembly been
8in effect, may apply for and obtain an exemption for subsequent
9purchases of computer equipment or enabling software purchased
10or leased to upgrade, supplement, or replace computer equipment
11or enabling software purchased or leased in the original
12investment that would have qualified.
13    The Department of Commerce and Economic Opportunity shall
14grant a certificate of exemption under this item (31) to
15qualified data centers as defined by Section 605-1025 of the
16Department of Commerce and Economic Opportunity Law of the
17Civil Administrative Code of Illinois.
18    For the purposes of this item (31):
19        "Data center" means a building or a series of buildings
20    rehabilitated or constructed to house working servers in
21    one physical location or multiple sites within the State of
22    Illinois.
23        "Qualified tangible personal property" means:
24    electrical systems and equipment; climate control and
25    chilling equipment and systems; mechanical systems and
26    equipment; monitoring and secure systems; emergency

 

 

HB3902 Engrossed- 37 -LRB101 13854 HLH 62714 b

1    generators; hardware; computers; servers; data storage
2    devices; network connectivity equipment; racks; cabinets;
3    telecommunications cabling infrastructure; raised floor
4    systems; peripheral components or systems; software;
5    mechanical, electrical, or plumbing systems; battery
6    systems; cooling systems and towers; temperature control
7    systems; other cabling; and other data center
8    infrastructure equipment and systems necessary to operate
9    qualified tangible personal property, including fixtures;
10    and component parts of any of the foregoing, including
11    installation, maintenance, repair, refurbishment, and
12    replacement of qualified tangible personal property to
13    generate, transform, transmit, distribute, or manage
14    electricity necessary to operate qualified tangible
15    personal property; and all other tangible personal
16    property that is essential to the operations of a computer
17    data center. The term "qualified tangible personal
18    property" also includes building materials physically
19    incorporated in to the qualifying data center. To document
20    the exemption allowed under this Section, the retailer must
21    obtain from the purchaser a copy of the certificate of
22    eligibility issued by the Department of Commerce and
23    Economic Opportunity.
24    This item (31) is exempt from the provisions of Section
253-75.
26(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;

 

 

HB3902 Engrossed- 38 -LRB101 13854 HLH 62714 b

1100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
27-12-19.)
 
3    Section 15. The Service Occupation Tax Act is amended by
4changing Section 3-5 as follows:
 
5    (35 ILCS 115/3-5)
6    Sec. 3-5. Exemptions. The following tangible personal
7property is exempt from the tax imposed by this Act:
8    (1) Personal property sold by a corporation, society,
9association, foundation, institution, or organization, other
10than a limited liability company, that is organized and
11operated as a not-for-profit service enterprise for the benefit
12of persons 65 years of age or older if the personal property
13was not purchased by the enterprise for the purpose of resale
14by the enterprise.
15    (2) Personal property purchased by a not-for-profit
16Illinois county fair association for use in conducting,
17operating, or promoting the county fair.
18    (3) Personal property purchased by any not-for-profit arts
19or cultural organization that establishes, by proof required by
20the Department by rule, that it has received an exemption under
21Section 501(c)(3) of the Internal Revenue Code and that is
22organized and operated primarily for the presentation or
23support of arts or cultural programming, activities, or
24services. These organizations include, but are not limited to,

 

 

HB3902 Engrossed- 39 -LRB101 13854 HLH 62714 b

1music and dramatic arts organizations such as symphony
2orchestras and theatrical groups, arts and cultural service
3organizations, local arts councils, visual arts organizations,
4and media arts organizations. On and after July 1, 2001 (the
5effective date of Public Act 92-35), however, an entity
6otherwise eligible for this exemption shall not make tax-free
7purchases unless it has an active identification number issued
8by the Department.
9    (4) Legal tender, currency, medallions, or gold or silver
10coinage issued by the State of Illinois, the government of the
11United States of America, or the government of any foreign
12country, and bullion.
13    (5) Until July 1, 2003 and beginning again on September 1,
142004 through August 30, 2014, graphic arts machinery and
15equipment, including repair and replacement parts, both new and
16used, and including that manufactured on special order or
17purchased for lease, certified by the purchaser to be used
18primarily for graphic arts production. Equipment includes
19chemicals or chemicals acting as catalysts but only if the
20chemicals or chemicals acting as catalysts effect a direct and
21immediate change upon a graphic arts product. Beginning on July
221, 2017, graphic arts machinery and equipment is included in
23the manufacturing and assembling machinery and equipment
24exemption under Section 2 of this Act.
25    (6) Personal property sold by a teacher-sponsored student
26organization affiliated with an elementary or secondary school

 

 

HB3902 Engrossed- 40 -LRB101 13854 HLH 62714 b

1located in Illinois.
2    (7) Farm machinery and equipment, both new and used,
3including that manufactured on special order, certified by the
4purchaser to be used primarily for production agriculture or
5State or federal agricultural programs, including individual
6replacement parts for the machinery and equipment, including
7machinery and equipment purchased for lease, and including
8implements of husbandry defined in Section 1-130 of the
9Illinois Vehicle Code, farm machinery and agricultural
10chemical and fertilizer spreaders, and nurse wagons required to
11be registered under Section 3-809 of the Illinois Vehicle Code,
12but excluding other motor vehicles required to be registered
13under the Illinois Vehicle Code. Horticultural polyhouses or
14hoop houses used for propagating, growing, or overwintering
15plants shall be considered farm machinery and equipment under
16this item (7). Agricultural chemical tender tanks and dry boxes
17shall include units sold separately from a motor vehicle
18required to be licensed and units sold mounted on a motor
19vehicle required to be licensed if the selling price of the
20tender is separately stated.
21    Farm machinery and equipment shall include precision
22farming equipment that is installed or purchased to be
23installed on farm machinery and equipment including, but not
24limited to, tractors, harvesters, sprayers, planters, seeders,
25or spreaders. Precision farming equipment includes, but is not
26limited to, soil testing sensors, computers, monitors,

 

 

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1software, global positioning and mapping systems, and other
2such equipment.
3    Farm machinery and equipment also includes computers,
4sensors, software, and related equipment used primarily in the
5computer-assisted operation of production agriculture
6facilities, equipment, and activities such as, but not limited
7to, the collection, monitoring, and correlation of animal and
8crop data for the purpose of formulating animal diets and
9agricultural chemicals. This item (7) is exempt from the
10provisions of Section 3-55.
11    (8) Until June 30, 2013, fuel and petroleum products sold
12to or used by an air common carrier, certified by the carrier
13to be used for consumption, shipment, or storage in the conduct
14of its business as an air common carrier, for a flight destined
15for or returning from a location or locations outside the
16United States without regard to previous or subsequent domestic
17stopovers.
18    Beginning July 1, 2013, fuel and petroleum products sold to
19or used by an air carrier, certified by the carrier to be used
20for consumption, shipment, or storage in the conduct of its
21business as an air common carrier, for a flight that (i) is
22engaged in foreign trade or is engaged in trade between the
23United States and any of its possessions and (ii) transports at
24least one individual or package for hire from the city of
25origination to the city of final destination on the same
26aircraft, without regard to a change in the flight number of

 

 

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1that aircraft.
2    (9) Proceeds of mandatory service charges separately
3stated on customers' bills for the purchase and consumption of
4food and beverages, to the extent that the proceeds of the
5service charge are in fact turned over as tips or as a
6substitute for tips to the employees who participate directly
7in preparing, serving, hosting or cleaning up the food or
8beverage function with respect to which the service charge is
9imposed.
10    (10) Until July 1, 2003, oil field exploration, drilling,
11and production equipment, including (i) rigs and parts of rigs,
12rotary rigs, cable tool rigs, and workover rigs, (ii) pipe and
13tubular goods, including casing and drill strings, (iii) pumps
14and pump-jack units, (iv) storage tanks and flow lines, (v) any
15individual replacement part for oil field exploration,
16drilling, and production equipment, and (vi) machinery and
17equipment purchased for lease; but excluding motor vehicles
18required to be registered under the Illinois Vehicle Code.
19    (11) Photoprocessing machinery and equipment, including
20repair and replacement parts, both new and used, including that
21manufactured on special order, certified by the purchaser to be
22used primarily for photoprocessing, and including
23photoprocessing machinery and equipment purchased for lease.
24    (12) Until July 1, 2023, coal and aggregate exploration,
25mining, off-highway hauling, processing, maintenance, and
26reclamation equipment, including replacement parts and

 

 

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1equipment, and including equipment purchased for lease, but
2excluding motor vehicles required to be registered under the
3Illinois Vehicle Code. The changes made to this Section by
4Public Act 97-767 apply on and after July 1, 2003, but no claim
5for credit or refund is allowed on or after August 16, 2013
6(the effective date of Public Act 98-456) for such taxes paid
7during the period beginning July 1, 2003 and ending on August
816, 2013 (the effective date of Public Act 98-456).
9    (13) Beginning January 1, 1992 and through June 30, 2016,
10food for human consumption that is to be consumed off the
11premises where it is sold (other than alcoholic beverages, soft
12drinks and food that has been prepared for immediate
13consumption) and prescription and non-prescription medicines,
14drugs, medical appliances, and insulin, urine testing
15materials, syringes, and needles used by diabetics, for human
16use, when purchased for use by a person receiving medical
17assistance under Article V of the Illinois Public Aid Code who
18resides in a licensed long-term care facility, as defined in
19the Nursing Home Care Act, or in a licensed facility as defined
20in the ID/DD Community Care Act, the MC/DD Act, or the
21Specialized Mental Health Rehabilitation Act of 2013.
22    (14) Semen used for artificial insemination of livestock
23for direct agricultural production.
24    (15) Horses, or interests in horses, registered with and
25meeting the requirements of any of the Arabian Horse Club
26Registry of America, Appaloosa Horse Club, American Quarter

 

 

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1Horse Association, United States Trotting Association, or
2Jockey Club, as appropriate, used for purposes of breeding or
3racing for prizes. This item (15) is exempt from the provisions
4of Section 3-55, and the exemption provided for under this item
5(15) applies for all periods beginning May 30, 1995, but no
6claim for credit or refund is allowed on or after January 1,
72008 (the effective date of Public Act 95-88) for such taxes
8paid during the period beginning May 30, 2000 and ending on
9January 1, 2008 (the effective date of Public Act 95-88).
10    (16) Computers and communications equipment utilized for
11any hospital purpose and equipment used in the diagnosis,
12analysis, or treatment of hospital patients sold to a lessor
13who leases the equipment, under a lease of one year or longer
14executed or in effect at the time of the purchase, to a
15hospital that has been issued an active tax exemption
16identification number by the Department under Section 1g of the
17Retailers' Occupation Tax Act.
18    (17) Personal property sold to a lessor who leases the
19property, under a lease of one year or longer executed or in
20effect at the time of the purchase, to a governmental body that
21has been issued an active tax exemption identification number
22by the Department under Section 1g of the Retailers' Occupation
23Tax Act.
24    (18) Beginning with taxable years ending on or after
25December 31, 1995 and ending with taxable years ending on or
26before December 31, 2004, personal property that is donated for

 

 

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1disaster relief to be used in a State or federally declared
2disaster area in Illinois or bordering Illinois by a
3manufacturer or retailer that is registered in this State to a
4corporation, society, association, foundation, or institution
5that has been issued a sales tax exemption identification
6number by the Department that assists victims of the disaster
7who reside within the declared disaster area.
8    (19) Beginning with taxable years ending on or after
9December 31, 1995 and ending with taxable years ending on or
10before December 31, 2004, personal property that is used in the
11performance of infrastructure repairs in this State, including
12but not limited to municipal roads and streets, access roads,
13bridges, sidewalks, waste disposal systems, water and sewer
14line extensions, water distribution and purification
15facilities, storm water drainage and retention facilities, and
16sewage treatment facilities, resulting from a State or
17federally declared disaster in Illinois or bordering Illinois
18when such repairs are initiated on facilities located in the
19declared disaster area within 6 months after the disaster.
20    (20) Beginning July 1, 1999, game or game birds sold at a
21"game breeding and hunting preserve area" as that term is used
22in the Wildlife Code. This paragraph is exempt from the
23provisions of Section 3-55.
24    (21) A motor vehicle, as that term is defined in Section
251-146 of the Illinois Vehicle Code, that is donated to a
26corporation, limited liability company, society, association,

 

 

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1foundation, or institution that is determined by the Department
2to be organized and operated exclusively for educational
3purposes. For purposes of this exemption, "a corporation,
4limited liability company, society, association, foundation,
5or institution organized and operated exclusively for
6educational purposes" means all tax-supported public schools,
7private schools that offer systematic instruction in useful
8branches of learning by methods common to public schools and
9that compare favorably in their scope and intensity with the
10course of study presented in tax-supported schools, and
11vocational or technical schools or institutes organized and
12operated exclusively to provide a course of study of not less
13than 6 weeks duration and designed to prepare individuals to
14follow a trade or to pursue a manual, technical, mechanical,
15industrial, business, or commercial occupation.
16    (22) Beginning January 1, 2000, personal property,
17including food, purchased through fundraising events for the
18benefit of a public or private elementary or secondary school,
19a group of those schools, or one or more school districts if
20the events are sponsored by an entity recognized by the school
21district that consists primarily of volunteers and includes
22parents and teachers of the school children. This paragraph
23does not apply to fundraising events (i) for the benefit of
24private home instruction or (ii) for which the fundraising
25entity purchases the personal property sold at the events from
26another individual or entity that sold the property for the

 

 

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1purpose of resale by the fundraising entity and that profits
2from the sale to the fundraising entity. This paragraph is
3exempt from the provisions of Section 3-55.
4    (23) Beginning January 1, 2000 and through December 31,
52001, new or used automatic vending machines that prepare and
6serve hot food and beverages, including coffee, soup, and other
7items, and replacement parts for these machines. Beginning
8January 1, 2002 and through June 30, 2003, machines and parts
9for machines used in commercial, coin-operated amusement and
10vending business if a use or occupation tax is paid on the
11gross receipts derived from the use of the commercial,
12coin-operated amusement and vending machines. This paragraph
13is exempt from the provisions of Section 3-55.
14    (24) Beginning on August 2, 2001 (the effective date of
15Public Act 92-227), computers and communications equipment
16utilized for any hospital purpose and equipment used in the
17diagnosis, analysis, or treatment of hospital patients sold to
18a lessor who leases the equipment, under a lease of one year or
19longer executed or in effect at the time of the purchase, to a
20hospital that has been issued an active tax exemption
21identification number by the Department under Section 1g of the
22Retailers' Occupation Tax Act. This paragraph is exempt from
23the provisions of Section 3-55.
24    (25) Beginning on August 2, 2001 (the effective date of
25Public Act 92-227), personal property sold to a lessor who
26leases the property, under a lease of one year or longer

 

 

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1executed or in effect at the time of the purchase, to a
2governmental body that has been issued an active tax exemption
3identification number by the Department under Section 1g of the
4Retailers' Occupation Tax Act. This paragraph is exempt from
5the provisions of Section 3-55.
6    (26) Beginning on January 1, 2002 and through June 30,
72016, tangible personal property purchased from an Illinois
8retailer by a taxpayer engaged in centralized purchasing
9activities in Illinois who will, upon receipt of the property
10in Illinois, temporarily store the property in Illinois (i) for
11the purpose of subsequently transporting it outside this State
12for use or consumption thereafter solely outside this State or
13(ii) for the purpose of being processed, fabricated, or
14manufactured into, attached to, or incorporated into other
15tangible personal property to be transported outside this State
16and thereafter used or consumed solely outside this State. The
17Director of Revenue shall, pursuant to rules adopted in
18accordance with the Illinois Administrative Procedure Act,
19issue a permit to any taxpayer in good standing with the
20Department who is eligible for the exemption under this
21paragraph (26). The permit issued under this paragraph (26)
22shall authorize the holder, to the extent and in the manner
23specified in the rules adopted under this Act, to purchase
24tangible personal property from a retailer exempt from the
25taxes imposed by this Act. Taxpayers shall maintain all
26necessary books and records to substantiate the use and

 

 

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1consumption of all such tangible personal property outside of
2the State of Illinois.
3    (27) Beginning January 1, 2008, tangible personal property
4used in the construction or maintenance of a community water
5supply, as defined under Section 3.145 of the Environmental
6Protection Act, that is operated by a not-for-profit
7corporation that holds a valid water supply permit issued under
8Title IV of the Environmental Protection Act. This paragraph is
9exempt from the provisions of Section 3-55.
10    (28) Tangible personal property sold to a
11public-facilities corporation, as described in Section
1211-65-10 of the Illinois Municipal Code, for purposes of
13constructing or furnishing a municipal convention hall, but
14only if the legal title to the municipal convention hall is
15transferred to the municipality without any further
16consideration by or on behalf of the municipality at the time
17of the completion of the municipal convention hall or upon the
18retirement or redemption of any bonds or other debt instruments
19issued by the public-facilities corporation in connection with
20the development of the municipal convention hall. This
21exemption includes existing public-facilities corporations as
22provided in Section 11-65-25 of the Illinois Municipal Code.
23This paragraph is exempt from the provisions of Section 3-55.
24    (29) Beginning January 1, 2010 and continuing through
25December 31, 2024, materials, parts, equipment, components,
26and furnishings incorporated into or upon an aircraft as part

 

 

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1of the modification, refurbishment, completion, replacement,
2repair, or maintenance of the aircraft. This exemption includes
3consumable supplies used in the modification, refurbishment,
4completion, replacement, repair, and maintenance of aircraft,
5but excludes any materials, parts, equipment, components, and
6consumable supplies used in the modification, replacement,
7repair, and maintenance of aircraft engines or power plants,
8whether such engines or power plants are installed or
9uninstalled upon any such aircraft. "Consumable supplies"
10include, but are not limited to, adhesive, tape, sandpaper,
11general purpose lubricants, cleaning solution, latex gloves,
12and protective films. This exemption applies only to the
13transfer of qualifying tangible personal property incident to
14the modification, refurbishment, completion, replacement,
15repair, or maintenance of an aircraft by persons who (i) hold
16an Air Agency Certificate and are empowered to operate an
17approved repair station by the Federal Aviation
18Administration, (ii) have a Class IV Rating, and (iii) conduct
19operations in accordance with Part 145 of the Federal Aviation
20Regulations. The exemption does not include aircraft operated
21by a commercial air carrier providing scheduled passenger air
22service pursuant to authority issued under Part 121 or Part 129
23of the Federal Aviation Regulations. The changes made to this
24paragraph (29) by Public Act 98-534 are declarative of existing
25law. It is the intent of the General Assembly that the
26exemption under this paragraph (29) applies continuously from

 

 

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1January 1, 2010 through December 31, 2024; however, no claim
2for credit or refund is allowed for taxes paid as a result of
3the disallowance of this exemption on or after January 1, 2015
4and prior to the effective date of this amendatory Act of the
5101st General Assembly.
6    (30) Beginning January 1, 2017, menstrual pads, tampons,
7and menstrual cups.
8    (31) Tangible personal property transferred to a purchaser
9who is exempt from tax by operation of federal law. This
10paragraph is exempt from the provisions of Section 3-55.
11    (32) Qualified tangible personal property used in the
12construction or operation of a data center that has been
13granted a certificate of exemption by the Department of
14Commerce and Economic Opportunity, whether that tangible
15personal property is purchased by the owner, operator, or
16tenant of the data center or by a contractor or subcontractor
17of the owner, operator, or tenant. Data centers that would have
18qualified for a certificate of exemption prior to January 1,
192020 had this amendatory Act of the 101st General Assembly been
20in effect, may apply for and obtain an exemption for subsequent
21purchases of computer equipment or enabling software purchased
22or leased to upgrade, supplement, or replace computer equipment
23or enabling software purchased or leased in the original
24investment that would have qualified.
25    The Department of Commerce and Economic Opportunity shall
26grant a certificate of exemption under this item (32) to

 

 

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1qualified data centers as defined by Section 605-1025 of the
2Department of Commerce and Economic Opportunity Law of the
3Civil Administrative Code of Illinois.
4    For the purposes of this item (32):
5        "Data center" means a building or a series of buildings
6    rehabilitated or constructed to house working servers in
7    one physical location or multiple sites within the State of
8    Illinois.
9        "Qualified tangible personal property" means:
10    electrical systems and equipment; climate control and
11    chilling equipment and systems; mechanical systems and
12    equipment; monitoring and secure systems; emergency
13    generators; hardware; computers; servers; data storage
14    devices; network connectivity equipment; racks; cabinets;
15    telecommunications cabling infrastructure; raised floor
16    systems; peripheral components or systems; software;
17    mechanical, electrical, or plumbing systems; battery
18    systems; cooling systems and towers; temperature control
19    systems; other cabling; and other data center
20    infrastructure equipment and systems necessary to operate
21    qualified tangible personal property, including fixtures;
22    and component parts of any of the foregoing, including
23    installation, maintenance, repair, refurbishment, and
24    replacement of qualified tangible personal property to
25    generate, transform, transmit, distribute, or manage
26    electricity necessary to operate qualified tangible

 

 

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1    personal property; and all other tangible personal
2    property that is essential to the operations of a computer
3    data center. The term "qualified tangible personal
4    property" also includes building materials physically
5    incorporated in to the qualifying data center. To document
6    the exemption allowed under this Section, the retailer must
7    obtain from the purchaser a copy of the certificate of
8    eligibility issued by the Department of Commerce and
9    Economic Opportunity.
10    This item (32) is exempt from the provisions of Section
113-55.
12(Source: P.A. 100-22, eff. 7-6-17; 100-594, eff. 6-29-18;
13100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81, eff.
147-12-19.)
 
15    Section 20. The Retailers' Occupation Tax Act is amended by
16changing Section 2-5 as follows:
 
17    (35 ILCS 120/2-5)
18    Sec. 2-5. Exemptions. Gross receipts from proceeds from the
19sale of the following tangible personal property are exempt
20from the tax imposed by this Act:
21        (1) Farm chemicals.
22        (2) Farm machinery and equipment, both new and used,
23    including that manufactured on special order, certified by
24    the purchaser to be used primarily for production

 

 

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1    agriculture or State or federal agricultural programs,
2    including individual replacement parts for the machinery
3    and equipment, including machinery and equipment purchased
4    for lease, and including implements of husbandry defined in
5    Section 1-130 of the Illinois Vehicle Code, farm machinery
6    and agricultural chemical and fertilizer spreaders, and
7    nurse wagons required to be registered under Section 3-809
8    of the Illinois Vehicle Code, but excluding other motor
9    vehicles required to be registered under the Illinois
10    Vehicle Code. Horticultural polyhouses or hoop houses used
11    for propagating, growing, or overwintering plants shall be
12    considered farm machinery and equipment under this item
13    (2). Agricultural chemical tender tanks and dry boxes shall
14    include units sold separately from a motor vehicle required
15    to be licensed and units sold mounted on a motor vehicle
16    required to be licensed, if the selling price of the tender
17    is separately stated.
18        Farm machinery and equipment shall include precision
19    farming equipment that is installed or purchased to be
20    installed on farm machinery and equipment including, but
21    not limited to, tractors, harvesters, sprayers, planters,
22    seeders, or spreaders. Precision farming equipment
23    includes, but is not limited to, soil testing sensors,
24    computers, monitors, software, global positioning and
25    mapping systems, and other such equipment.
26        Farm machinery and equipment also includes computers,

 

 

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1    sensors, software, and related equipment used primarily in
2    the computer-assisted operation of production agriculture
3    facilities, equipment, and activities such as, but not
4    limited to, the collection, monitoring, and correlation of
5    animal and crop data for the purpose of formulating animal
6    diets and agricultural chemicals. This item (2) is exempt
7    from the provisions of Section 2-70.
8        (3) Until July 1, 2003, distillation machinery and
9    equipment, sold as a unit or kit, assembled or installed by
10    the retailer, certified by the user to be used only for the
11    production of ethyl alcohol that will be used for
12    consumption as motor fuel or as a component of motor fuel
13    for the personal use of the user, and not subject to sale
14    or resale.
15        (4) Until July 1, 2003 and beginning again September 1,
16    2004 through August 30, 2014, graphic arts machinery and
17    equipment, including repair and replacement parts, both
18    new and used, and including that manufactured on special
19    order or purchased for lease, certified by the purchaser to
20    be used primarily for graphic arts production. Equipment
21    includes chemicals or chemicals acting as catalysts but
22    only if the chemicals or chemicals acting as catalysts
23    effect a direct and immediate change upon a graphic arts
24    product. Beginning on July 1, 2017, graphic arts machinery
25    and equipment is included in the manufacturing and
26    assembling machinery and equipment exemption under

 

 

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1    paragraph (14).
2        (5) A motor vehicle that is used for automobile
3    renting, as defined in the Automobile Renting Occupation
4    and Use Tax Act. This paragraph is exempt from the
5    provisions of Section 2-70.
6        (6) Personal property sold by a teacher-sponsored
7    student organization affiliated with an elementary or
8    secondary school located in Illinois.
9        (7) Until July 1, 2003, proceeds of that portion of the
10    selling price of a passenger car the sale of which is
11    subject to the Replacement Vehicle Tax.
12        (8) Personal property sold to an Illinois county fair
13    association for use in conducting, operating, or promoting
14    the county fair.
15        (9) Personal property sold to a not-for-profit arts or
16    cultural organization that establishes, by proof required
17    by the Department by rule, that it has received an
18    exemption under Section 501(c)(3) of the Internal Revenue
19    Code and that is organized and operated primarily for the
20    presentation or support of arts or cultural programming,
21    activities, or services. These organizations include, but
22    are not limited to, music and dramatic arts organizations
23    such as symphony orchestras and theatrical groups, arts and
24    cultural service organizations, local arts councils,
25    visual arts organizations, and media arts organizations.
26    On and after July 1, 2001 (the effective date of Public Act

 

 

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1    92-35), however, an entity otherwise eligible for this
2    exemption shall not make tax-free purchases unless it has
3    an active identification number issued by the Department.
4        (10) Personal property sold by a corporation, society,
5    association, foundation, institution, or organization,
6    other than a limited liability company, that is organized
7    and operated as a not-for-profit service enterprise for the
8    benefit of persons 65 years of age or older if the personal
9    property was not purchased by the enterprise for the
10    purpose of resale by the enterprise.
11        (11) Personal property sold to a governmental body, to
12    a corporation, society, association, foundation, or
13    institution organized and operated exclusively for
14    charitable, religious, or educational purposes, or to a
15    not-for-profit corporation, society, association,
16    foundation, institution, or organization that has no
17    compensated officers or employees and that is organized and
18    operated primarily for the recreation of persons 55 years
19    of age or older. A limited liability company may qualify
20    for the exemption under this paragraph only if the limited
21    liability company is organized and operated exclusively
22    for educational purposes. On and after July 1, 1987,
23    however, no entity otherwise eligible for this exemption
24    shall make tax-free purchases unless it has an active
25    identification number issued by the Department.
26        (12) (Blank).

 

 

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1        (12-5) On and after July 1, 2003 and through June 30,
2    2004, motor vehicles of the second division with a gross
3    vehicle weight in excess of 8,000 pounds that are subject
4    to the commercial distribution fee imposed under Section
5    3-815.1 of the Illinois Vehicle Code. Beginning on July 1,
6    2004 and through June 30, 2005, the use in this State of
7    motor vehicles of the second division: (i) with a gross
8    vehicle weight rating in excess of 8,000 pounds; (ii) that
9    are subject to the commercial distribution fee imposed
10    under Section 3-815.1 of the Illinois Vehicle Code; and
11    (iii) that are primarily used for commercial purposes.
12    Through June 30, 2005, this exemption applies to repair and
13    replacement parts added after the initial purchase of such
14    a motor vehicle if that motor vehicle is used in a manner
15    that would qualify for the rolling stock exemption
16    otherwise provided for in this Act. For purposes of this
17    paragraph, "used for commercial purposes" means the
18    transportation of persons or property in furtherance of any
19    commercial or industrial enterprise whether for-hire or
20    not.
21        (13) Proceeds from sales to owners, lessors, or
22    shippers of tangible personal property that is utilized by
23    interstate carriers for hire for use as rolling stock
24    moving in interstate commerce and equipment operated by a
25    telecommunications provider, licensed as a common carrier
26    by the Federal Communications Commission, which is

 

 

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1    permanently installed in or affixed to aircraft moving in
2    interstate commerce.
3        (14) Machinery and equipment that will be used by the
4    purchaser, or a lessee of the purchaser, primarily in the
5    process of manufacturing or assembling tangible personal
6    property for wholesale or retail sale or lease, whether the
7    sale or lease is made directly by the manufacturer or by
8    some other person, whether the materials used in the
9    process are owned by the manufacturer or some other person,
10    or whether the sale or lease is made apart from or as an
11    incident to the seller's engaging in the service occupation
12    of producing machines, tools, dies, jigs, patterns,
13    gauges, or other similar items of no commercial value on
14    special order for a particular purchaser. The exemption
15    provided by this paragraph (14) does not include machinery
16    and equipment used in (i) the generation of electricity for
17    wholesale or retail sale; (ii) the generation or treatment
18    of natural or artificial gas for wholesale or retail sale
19    that is delivered to customers through pipes, pipelines, or
20    mains; or (iii) the treatment of water for wholesale or
21    retail sale that is delivered to customers through pipes,
22    pipelines, or mains. The provisions of Public Act 98-583
23    are declaratory of existing law as to the meaning and scope
24    of this exemption. Beginning on July 1, 2017, the exemption
25    provided by this paragraph (14) includes, but is not
26    limited to, graphic arts machinery and equipment, as

 

 

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1    defined in paragraph (4) of this Section.
2        (15) Proceeds of mandatory service charges separately
3    stated on customers' bills for purchase and consumption of
4    food and beverages, to the extent that the proceeds of the
5    service charge are in fact turned over as tips or as a
6    substitute for tips to the employees who participate
7    directly in preparing, serving, hosting or cleaning up the
8    food or beverage function with respect to which the service
9    charge is imposed.
10        (16) Tangible personal property sold to a purchaser if
11    the purchaser is exempt from use tax by operation of
12    federal law. This paragraph is exempt from the provisions
13    of Section 2-70.
14        (17) Tangible personal property sold to a common
15    carrier by rail or motor that receives the physical
16    possession of the property in Illinois and that transports
17    the property, or shares with another common carrier in the
18    transportation of the property, out of Illinois on a
19    standard uniform bill of lading showing the seller of the
20    property as the shipper or consignor of the property to a
21    destination outside Illinois, for use outside Illinois.
22        (18) Legal tender, currency, medallions, or gold or
23    silver coinage issued by the State of Illinois, the
24    government of the United States of America, or the
25    government of any foreign country, and bullion.
26        (19) Until July 1, 2003, oil field exploration,

 

 

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1    drilling, and production equipment, including (i) rigs and
2    parts of rigs, rotary rigs, cable tool rigs, and workover
3    rigs, (ii) pipe and tubular goods, including casing and
4    drill strings, (iii) pumps and pump-jack units, (iv)
5    storage tanks and flow lines, (v) any individual
6    replacement part for oil field exploration, drilling, and
7    production equipment, and (vi) machinery and equipment
8    purchased for lease; but excluding motor vehicles required
9    to be registered under the Illinois Vehicle Code.
10        (20) Photoprocessing machinery and equipment,
11    including repair and replacement parts, both new and used,
12    including that manufactured on special order, certified by
13    the purchaser to be used primarily for photoprocessing, and
14    including photoprocessing machinery and equipment
15    purchased for lease.
16        (21) Until July 1, 2023, coal and aggregate
17    exploration, mining, off-highway hauling, processing,
18    maintenance, and reclamation equipment, including
19    replacement parts and equipment, and including equipment
20    purchased for lease, but excluding motor vehicles required
21    to be registered under the Illinois Vehicle Code. The
22    changes made to this Section by Public Act 97-767 apply on
23    and after July 1, 2003, but no claim for credit or refund
24    is allowed on or after August 16, 2013 (the effective date
25    of Public Act 98-456) for such taxes paid during the period
26    beginning July 1, 2003 and ending on August 16, 2013 (the

 

 

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1    effective date of Public Act 98-456).
2        (22) Until June 30, 2013, fuel and petroleum products
3    sold to or used by an air carrier, certified by the carrier
4    to be used for consumption, shipment, or storage in the
5    conduct of its business as an air common carrier, for a
6    flight destined for or returning from a location or
7    locations outside the United States without regard to
8    previous or subsequent domestic stopovers.
9        Beginning July 1, 2013, fuel and petroleum products
10    sold to or used by an air carrier, certified by the carrier
11    to be used for consumption, shipment, or storage in the
12    conduct of its business as an air common carrier, for a
13    flight that (i) is engaged in foreign trade or is engaged
14    in trade between the United States and any of its
15    possessions and (ii) transports at least one individual or
16    package for hire from the city of origination to the city
17    of final destination on the same aircraft, without regard
18    to a change in the flight number of that aircraft.
19        (23) A transaction in which the purchase order is
20    received by a florist who is located outside Illinois, but
21    who has a florist located in Illinois deliver the property
22    to the purchaser or the purchaser's donee in Illinois.
23        (24) Fuel consumed or used in the operation of ships,
24    barges, or vessels that are used primarily in or for the
25    transportation of property or the conveyance of persons for
26    hire on rivers bordering on this State if the fuel is

 

 

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1    delivered by the seller to the purchaser's barge, ship, or
2    vessel while it is afloat upon that bordering river.
3        (25) Except as provided in item (25-5) of this Section,
4    a motor vehicle sold in this State to a nonresident even
5    though the motor vehicle is delivered to the nonresident in
6    this State, if the motor vehicle is not to be titled in
7    this State, and if a drive-away permit is issued to the
8    motor vehicle as provided in Section 3-603 of the Illinois
9    Vehicle Code or if the nonresident purchaser has vehicle
10    registration plates to transfer to the motor vehicle upon
11    returning to his or her home state. The issuance of the
12    drive-away permit or having the out-of-state registration
13    plates to be transferred is prima facie evidence that the
14    motor vehicle will not be titled in this State.
15        (25-5) The exemption under item (25) does not apply if
16    the state in which the motor vehicle will be titled does
17    not allow a reciprocal exemption for a motor vehicle sold
18    and delivered in that state to an Illinois resident but
19    titled in Illinois. The tax collected under this Act on the
20    sale of a motor vehicle in this State to a resident of
21    another state that does not allow a reciprocal exemption
22    shall be imposed at a rate equal to the state's rate of tax
23    on taxable property in the state in which the purchaser is
24    a resident, except that the tax shall not exceed the tax
25    that would otherwise be imposed under this Act. At the time
26    of the sale, the purchaser shall execute a statement,

 

 

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1    signed under penalty of perjury, of his or her intent to
2    title the vehicle in the state in which the purchaser is a
3    resident within 30 days after the sale and of the fact of
4    the payment to the State of Illinois of tax in an amount
5    equivalent to the state's rate of tax on taxable property
6    in his or her state of residence and shall submit the
7    statement to the appropriate tax collection agency in his
8    or her state of residence. In addition, the retailer must
9    retain a signed copy of the statement in his or her
10    records. Nothing in this item shall be construed to require
11    the removal of the vehicle from this state following the
12    filing of an intent to title the vehicle in the purchaser's
13    state of residence if the purchaser titles the vehicle in
14    his or her state of residence within 30 days after the date
15    of sale. The tax collected under this Act in accordance
16    with this item (25-5) shall be proportionately distributed
17    as if the tax were collected at the 6.25% general rate
18    imposed under this Act.
19        (25-7) Beginning on July 1, 2007, no tax is imposed
20    under this Act on the sale of an aircraft, as defined in
21    Section 3 of the Illinois Aeronautics Act, if all of the
22    following conditions are met:
23            (1) the aircraft leaves this State within 15 days
24        after the later of either the issuance of the final
25        billing for the sale of the aircraft, or the authorized
26        approval for return to service, completion of the

 

 

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1        maintenance record entry, and completion of the test
2        flight and ground test for inspection, as required by
3        14 C.F.R. 91.407;
4            (2) the aircraft is not based or registered in this
5        State after the sale of the aircraft; and
6            (3) the seller retains in his or her books and
7        records and provides to the Department a signed and
8        dated certification from the purchaser, on a form
9        prescribed by the Department, certifying that the
10        requirements of this item (25-7) are met. The
11        certificate must also include the name and address of
12        the purchaser, the address of the location where the
13        aircraft is to be titled or registered, the address of
14        the primary physical location of the aircraft, and
15        other information that the Department may reasonably
16        require.
17        For purposes of this item (25-7):
18        "Based in this State" means hangared, stored, or
19    otherwise used, excluding post-sale customizations as
20    defined in this Section, for 10 or more days in each
21    12-month period immediately following the date of the sale
22    of the aircraft.
23        "Registered in this State" means an aircraft
24    registered with the Department of Transportation,
25    Aeronautics Division, or titled or registered with the
26    Federal Aviation Administration to an address located in

 

 

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1    this State.
2        This paragraph (25-7) is exempt from the provisions of
3    Section 2-70.
4        (26) Semen used for artificial insemination of
5    livestock for direct agricultural production.
6        (27) Horses, or interests in horses, registered with
7    and meeting the requirements of any of the Arabian Horse
8    Club Registry of America, Appaloosa Horse Club, American
9    Quarter Horse Association, United States Trotting
10    Association, or Jockey Club, as appropriate, used for
11    purposes of breeding or racing for prizes. This item (27)
12    is exempt from the provisions of Section 2-70, and the
13    exemption provided for under this item (27) applies for all
14    periods beginning May 30, 1995, but no claim for credit or
15    refund is allowed on or after January 1, 2008 (the
16    effective date of Public Act 95-88) for such taxes paid
17    during the period beginning May 30, 2000 and ending on
18    January 1, 2008 (the effective date of Public Act 95-88).
19        (28) Computers and communications equipment utilized
20    for any hospital purpose and equipment used in the
21    diagnosis, analysis, or treatment of hospital patients
22    sold to a lessor who leases the equipment, under a lease of
23    one year or longer executed or in effect at the time of the
24    purchase, to a hospital that has been issued an active tax
25    exemption identification number by the Department under
26    Section 1g of this Act.

 

 

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1        (29) Personal property sold to a lessor who leases the
2    property, under a lease of one year or longer executed or
3    in effect at the time of the purchase, to a governmental
4    body that has been issued an active tax exemption
5    identification number by the Department under Section 1g of
6    this Act.
7        (30) Beginning with taxable years ending on or after
8    December 31, 1995 and ending with taxable years ending on
9    or before December 31, 2004, personal property that is
10    donated for disaster relief to be used in a State or
11    federally declared disaster area in Illinois or bordering
12    Illinois by a manufacturer or retailer that is registered
13    in this State to a corporation, society, association,
14    foundation, or institution that has been issued a sales tax
15    exemption identification number by the Department that
16    assists victims of the disaster who reside within the
17    declared disaster area.
18        (31) Beginning with taxable years ending on or after
19    December 31, 1995 and ending with taxable years ending on
20    or before December 31, 2004, personal property that is used
21    in the performance of infrastructure repairs in this State,
22    including but not limited to municipal roads and streets,
23    access roads, bridges, sidewalks, waste disposal systems,
24    water and sewer line extensions, water distribution and
25    purification facilities, storm water drainage and
26    retention facilities, and sewage treatment facilities,

 

 

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1    resulting from a State or federally declared disaster in
2    Illinois or bordering Illinois when such repairs are
3    initiated on facilities located in the declared disaster
4    area within 6 months after the disaster.
5        (32) Beginning July 1, 1999, game or game birds sold at
6    a "game breeding and hunting preserve area" as that term is
7    used in the Wildlife Code. This paragraph is exempt from
8    the provisions of Section 2-70.
9        (33) A motor vehicle, as that term is defined in
10    Section 1-146 of the Illinois Vehicle Code, that is donated
11    to a corporation, limited liability company, society,
12    association, foundation, or institution that is determined
13    by the Department to be organized and operated exclusively
14    for educational purposes. For purposes of this exemption,
15    "a corporation, limited liability company, society,
16    association, foundation, or institution organized and
17    operated exclusively for educational purposes" means all
18    tax-supported public schools, private schools that offer
19    systematic instruction in useful branches of learning by
20    methods common to public schools and that compare favorably
21    in their scope and intensity with the course of study
22    presented in tax-supported schools, and vocational or
23    technical schools or institutes organized and operated
24    exclusively to provide a course of study of not less than 6
25    weeks duration and designed to prepare individuals to
26    follow a trade or to pursue a manual, technical,

 

 

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1    mechanical, industrial, business, or commercial
2    occupation.
3        (34) Beginning January 1, 2000, personal property,
4    including food, purchased through fundraising events for
5    the benefit of a public or private elementary or secondary
6    school, a group of those schools, or one or more school
7    districts if the events are sponsored by an entity
8    recognized by the school district that consists primarily
9    of volunteers and includes parents and teachers of the
10    school children. This paragraph does not apply to
11    fundraising events (i) for the benefit of private home
12    instruction or (ii) for which the fundraising entity
13    purchases the personal property sold at the events from
14    another individual or entity that sold the property for the
15    purpose of resale by the fundraising entity and that
16    profits from the sale to the fundraising entity. This
17    paragraph is exempt from the provisions of Section 2-70.
18        (35) Beginning January 1, 2000 and through December 31,
19    2001, new or used automatic vending machines that prepare
20    and serve hot food and beverages, including coffee, soup,
21    and other items, and replacement parts for these machines.
22    Beginning January 1, 2002 and through June 30, 2003,
23    machines and parts for machines used in commercial,
24    coin-operated amusement and vending business if a use or
25    occupation tax is paid on the gross receipts derived from
26    the use of the commercial, coin-operated amusement and

 

 

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1    vending machines. This paragraph is exempt from the
2    provisions of Section 2-70.
3        (35-5) Beginning August 23, 2001 and through June 30,
4    2016, food for human consumption that is to be consumed off
5    the premises where it is sold (other than alcoholic
6    beverages, soft drinks, and food that has been prepared for
7    immediate consumption) and prescription and
8    nonprescription medicines, drugs, medical appliances, and
9    insulin, urine testing materials, syringes, and needles
10    used by diabetics, for human use, when purchased for use by
11    a person receiving medical assistance under Article V of
12    the Illinois Public Aid Code who resides in a licensed
13    long-term care facility, as defined in the Nursing Home
14    Care Act, or a licensed facility as defined in the ID/DD
15    Community Care Act, the MC/DD Act, or the Specialized
16    Mental Health Rehabilitation Act of 2013.
17        (36) Beginning August 2, 2001, computers and
18    communications equipment utilized for any hospital purpose
19    and equipment used in the diagnosis, analysis, or treatment
20    of hospital patients sold to a lessor who leases the
21    equipment, under a lease of one year or longer executed or
22    in effect at the time of the purchase, to a hospital that
23    has been issued an active tax exemption identification
24    number by the Department under Section 1g of this Act. This
25    paragraph is exempt from the provisions of Section 2-70.
26        (37) Beginning August 2, 2001, personal property sold

 

 

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1    to a lessor who leases the property, under a lease of one
2    year or longer executed or in effect at the time of the
3    purchase, to a governmental body that has been issued an
4    active tax exemption identification number by the
5    Department under Section 1g of this Act. This paragraph is
6    exempt from the provisions of Section 2-70.
7        (38) Beginning on January 1, 2002 and through June 30,
8    2016, tangible personal property purchased from an
9    Illinois retailer by a taxpayer engaged in centralized
10    purchasing activities in Illinois who will, upon receipt of
11    the property in Illinois, temporarily store the property in
12    Illinois (i) for the purpose of subsequently transporting
13    it outside this State for use or consumption thereafter
14    solely outside this State or (ii) for the purpose of being
15    processed, fabricated, or manufactured into, attached to,
16    or incorporated into other tangible personal property to be
17    transported outside this State and thereafter used or
18    consumed solely outside this State. The Director of Revenue
19    shall, pursuant to rules adopted in accordance with the
20    Illinois Administrative Procedure Act, issue a permit to
21    any taxpayer in good standing with the Department who is
22    eligible for the exemption under this paragraph (38). The
23    permit issued under this paragraph (38) shall authorize the
24    holder, to the extent and in the manner specified in the
25    rules adopted under this Act, to purchase tangible personal
26    property from a retailer exempt from the taxes imposed by

 

 

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1    this Act. Taxpayers shall maintain all necessary books and
2    records to substantiate the use and consumption of all such
3    tangible personal property outside of the State of
4    Illinois.
5        (39) Beginning January 1, 2008, tangible personal
6    property used in the construction or maintenance of a
7    community water supply, as defined under Section 3.145 of
8    the Environmental Protection Act, that is operated by a
9    not-for-profit corporation that holds a valid water supply
10    permit issued under Title IV of the Environmental
11    Protection Act. This paragraph is exempt from the
12    provisions of Section 2-70.
13        (40) Beginning January 1, 2010 and continuing through
14    December 31, 2024, materials, parts, equipment,
15    components, and furnishings incorporated into or upon an
16    aircraft as part of the modification, refurbishment,
17    completion, replacement, repair, or maintenance of the
18    aircraft. This exemption includes consumable supplies used
19    in the modification, refurbishment, completion,
20    replacement, repair, and maintenance of aircraft, but
21    excludes any materials, parts, equipment, components, and
22    consumable supplies used in the modification, replacement,
23    repair, and maintenance of aircraft engines or power
24    plants, whether such engines or power plants are installed
25    or uninstalled upon any such aircraft. "Consumable
26    supplies" include, but are not limited to, adhesive, tape,

 

 

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1    sandpaper, general purpose lubricants, cleaning solution,
2    latex gloves, and protective films. This exemption applies
3    only to the sale of qualifying tangible personal property
4    to persons who modify, refurbish, complete, replace, or
5    maintain an aircraft and who (i) hold an Air Agency
6    Certificate and are empowered to operate an approved repair
7    station by the Federal Aviation Administration, (ii) have a
8    Class IV Rating, and (iii) conduct operations in accordance
9    with Part 145 of the Federal Aviation Regulations. The
10    exemption does not include aircraft operated by a
11    commercial air carrier providing scheduled passenger air
12    service pursuant to authority issued under Part 121 or Part
13    129 of the Federal Aviation Regulations. The changes made
14    to this paragraph (40) by Public Act 98-534 are declarative
15    of existing law. It is the intent of the General Assembly
16    that the exemption under this paragraph (40) applies
17    continuously from January 1, 2010 through December 31,
18    2024; however, no claim for credit or refund is allowed for
19    taxes paid as a result of the disallowance of this
20    exemption on or after January 1, 2015 and prior to the
21    effective date of this amendatory Act of the 101st General
22    Assembly.
23        (41) Tangible personal property sold to a
24    public-facilities corporation, as described in Section
25    11-65-10 of the Illinois Municipal Code, for purposes of
26    constructing or furnishing a municipal convention hall,

 

 

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1    but only if the legal title to the municipal convention
2    hall is transferred to the municipality without any further
3    consideration by or on behalf of the municipality at the
4    time of the completion of the municipal convention hall or
5    upon the retirement or redemption of any bonds or other
6    debt instruments issued by the public-facilities
7    corporation in connection with the development of the
8    municipal convention hall. This exemption includes
9    existing public-facilities corporations as provided in
10    Section 11-65-25 of the Illinois Municipal Code. This
11    paragraph is exempt from the provisions of Section 2-70.
12        (42) Beginning January 1, 2017, menstrual pads,
13    tampons, and menstrual cups.
14        (43) Merchandise that is subject to the Rental Purchase
15    Agreement Occupation and Use Tax. The purchaser must
16    certify that the item is purchased to be rented subject to
17    a rental purchase agreement, as defined in the Rental
18    Purchase Agreement Act, and provide proof of registration
19    under the Rental Purchase Agreement Occupation and Use Tax
20    Act. This paragraph is exempt from the provisions of
21    Section 2-70.
22        (44) Qualified tangible personal property used in the
23    construction or operation of a data center that has been
24    granted a certificate of exemption by the Department of
25    Commerce and Economic Opportunity, whether that tangible
26    personal property is purchased by the owner, operator, or

 

 

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1    tenant of the data center or by a contractor or
2    subcontractor of the owner, operator, or tenant. Data
3    centers that would have qualified for a certificate of
4    exemption prior to January 1, 2020 had this amendatory Act
5    of the 101st General Assembly been in effect, may apply for
6    and obtain an exemption for subsequent purchases of
7    computer equipment or enabling software purchased or
8    leased to upgrade, supplement, or replace computer
9    equipment or enabling software purchased or leased in the
10    original investment that would have qualified.
11        The Department of Commerce and Economic Opportunity
12    shall grant a certificate of exemption under this item (44)
13    to qualified data centers as defined by Section 605-1025 of
14    the Department of Commerce and Economic Opportunity Law of
15    the Civil Administrative Code of Illinois.
16        For the purposes of this item (44):
17            "Data center" means a building or a series of
18        buildings rehabilitated or constructed to house
19        working servers in one physical location or multiple
20        sites within the State of Illinois.
21            "Qualified tangible personal property" means:
22        electrical systems and equipment; climate control and
23        chilling equipment and systems; mechanical systems and
24        equipment; monitoring and secure systems; emergency
25        generators; hardware; computers; servers; data storage
26        devices; network connectivity equipment; racks;

 

 

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1        cabinets; telecommunications cabling infrastructure;
2        raised floor systems; peripheral components or
3        systems; software; mechanical, electrical, or plumbing
4        systems; battery systems; cooling systems and towers;
5        temperature control systems; other cabling; and other
6        data center infrastructure equipment and systems
7        necessary to operate qualified tangible personal
8        property, including fixtures; and component parts of
9        any of the foregoing, including installation,
10        maintenance, repair, refurbishment, and replacement of
11        qualified tangible personal property to generate,
12        transform, transmit, distribute, or manage electricity
13        necessary to operate qualified tangible personal
14        property; and all other tangible personal property
15        that is essential to the operations of a computer data
16        center. The term "qualified tangible personal
17        property" also includes building materials physically
18        incorporated in to the qualifying data center. To
19        document the exemption allowed under this Section, the
20        retailer must obtain from the purchaser a copy of the
21        certificate of eligibility issued by the Department of
22        Commerce and Economic Opportunity.
23        This item (44) is exempt from the provisions of Section
24    2-70.
25(Source: P.A. 100-22, eff. 7-6-17; 100-321, eff. 8-24-17;
26100-437, eff. 1-1-18; 100-594, eff. 6-29-18; 100-863, eff.

 

 

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18-14-18; 100-1171, eff. 1-4-19; 101-31, eff. 6-28-19; 101-81,
2eff. 7-12-19.)
 
3    Section 99. Effective date. This Act takes effect upon
4becoming law.